WIN! - Isabel Valdés · PDF fileDoug Darfield • Roberto Orci • Lee Vann • Lucia Ballas ... make subconcious decisions based on ... the insights and intelligence to win the market

Copyrighted material. All rights reserved.

WIN!the hispanic

MarketStrategies for

Business Growth

M. Isabel Valdéscontributors

Steve Moya • Carlos Orta • Michael Klein & David Wellisch

Alison K. Paul • Carlos Santiago • Jessica Pantanini • Marie Quintana

Gabriela Alcántara-Diaz • Don Longo • César Melgoza

Doug Darfield • Roberto Orci • Lee Vann • Lucia Ballas-Traynor

Martha Montoya • Federico Subervi • Carlos Garcia • Derene Allen


Paramount Market Publishing, Inc.

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Copyright © 2012 M. Isabel Valdés

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Copyrighted material. All rights reserved. xv

Introduction

business Growth and sustainability are hispanic!

M. isabel Valdés president, iVc in-culture Marketing

IF ThE U. S. Census Bureau is right, and it usually is, by 2040, 51 percent

of the total population of the U.S. will be multi-cultural, of these, 56 per-

cent will be hispanic. From a marketing perspective, a large percentage of

these consumers are already here. Right now, 50.1 percent of U.S. chil-

dren aged three and under, are non-White and that doesn’t include babies

in Puerto Rico. These young multi-cultural consumers have already joined

the marketplace. Together with their pre-teen, teen, and young adult sib-

lings, they are not only developing their product preferences, but they are

also using traditional and social media programs, choosing their music

and entertainment outlets, their favorite sports, and so on.

In other words, the 2040 “future” multi-cultural customer, patient,

client, home buyer, new mom, loan applicant, student, business mar-

ket is already here, building loyalties, preferences, and consuming. The

hispanic consumer over-indexes exponentially in the young consumer

age segments, and therefore, will also be significantly over-represented by

2040, when the total hispanic population is projected to reach 108 mil-

lion compared with African Americans at 50 million and Asians, at 31

million. Combined, hispanics, African Americans, and Asians, add up to

213 million. The mostly White, non-hispanic, aging, retired baby boomer

population will be composed of 205 million people, who are expected to

be significantly less active in the marketplace due to age.

As we know, consumers begin to acquire their likes and dislikes at an

early age, mostly through their parents, siblings, peers, family friends,


xvi WIN! The Hispanic Market

1. Pablo Schneider quoted “Sol” Trujillo on Fox News Latino, October 28, 2011. http://latino.foxnews.com/latino/politics/2011/10/28/follow-money-it-leads-to-latino-market

2. “Advertising 2011 Budget Alignment: Maximizing Impact in the Hispanic Market,“ 2011 AHAA Hispanic Advertising Ad Trend, Full Report, by Carlos Santiago, CEO, SSG and Cristina Garcia, PhD, Statistics Professor, USC; commissioned by AHAA

and grandparents—in other words, though their cultural communities,

which I have labeled “in-culture” for lack of a better term. It follows

simple math and logic that every business in America that expects to be

successful and thriving in 2040 has to invest to appeal to and win these

consumers and their families.

Otherwise, why or how will they build deep and lasting “emotional

connections” with your brand? Why would these consumers purchase

your brand, or go to your bank or visit your clinic or hospital, attend your

college or university, if you are not a part of their personal network and

cultural community? If you are not close, inviting, and talking to them,

in a cultural language that is meaningful and resonates with them? Why

would they spontaneously start consuming your brand of beverage, or

patronize your restaurant, go to your bank, or hospital if you don’t invite

them—or their parents or grandparents—in?

Is your corporation investing in the opportunity?

What is surprising is that the majority of U.S. corporations ignore the

$1.1 trillion U.S. hispanic consumer market. As global CEO “Sol” Trujillo

said at the Wall Street Summit in New York in October 2011, “The U.S.

hispanic market will soon be the eleventh largest economy in the world,”

if it were a separate country. That puts the U.S. hispanic market in the

same category as Brazil, Russia, India, and China (the BRIC countries),

with more per capita purchasing power than many of the g-20 member

nations as well.1 In other words, the U.S. hispanic market has the poten-

tial to be the main source of growth for most business categories in a

slow economy, but only a small number of corporations invest well and

accordingly, attract and invite these consumers with relevant products,

services, and messages, using the best in-culture, professional expertise

that is available right now.

A 2011 study by AhAA2 (Association of hispanic Advertising


Inroduction: Business Growth and Sustainability Are Hispanic! xvii

Agencies) found that only 27 companies—5 percent of the top 500

advertisers—had an aggregate hispanic advertising expenditure of just

over 14 percent, comparable to the percentage of adults that are hispanic

according to the 2010 Census. This makes no sense, particularly when it

has been demonstrated that strategic, sustained, and robust investment in

the hispanic market not only provides growth and sustainability to those

corporations but also increases shareholder value.3 “With a confidence

level over 95 percent a best-in-class company allocating one quarter of its

ad spend to hispanic media (Spanish and Bilingual) over five years would

generate annual revenue growth of 6.7 percent,” according to the AhAA

study, which includes only advertising, “over-the-line” expenditures.

A few best-in-class companies are already experiencing steady growth

from their hispanic market investment. however, based on this same study,

we know that 57 percent of these top 500 advertisers “Don’t get it” and

spent less than one percent targeting the hispanic consumer market in

2010. Many in the trade question this lack of investment.

A business blind spot?

The social implications of this colossal demographic shift and exponential

hispanic population growth are obvious and explicit as well as subtle

and even subconscious. The obvious is that America is becoming brown

and black, and that mainstream American culture is shifting. We are

no longer surprised by learning that the most popular sauce in America

is a Mexican-style salsa picante, or that one of the best-loved ice cream

flavors is Dulce de Leche, or that every day there are growing numbers

of multicultural icons among artists and musicians, media programs,

fashion leaders and so on.

however, there are the unconscious responses—those we may not be

aware of or that are not verbalized. I believe the latter may account for

some of the reticence to seriously target the hispanic market. This blind

spot can have negative implications when it comes to business decision-

making.

3. “Does a Well-Resourced Hispanic Corporate Strategy Translate into Shareholder Value Creation?” by Santiago Solutions Group, Inc., 2006.


xviii WIN! The Hispanic Market

Let me borrow from Malcolm gladwell, the bestselling author of The

Tipping Point and Blink. In Blink, gladwell talks about “thin slicing,” that

fast, unconscious psychological response mechanism that “makes us”

make subconcious decisions based on preconceived, erroneous ideas. I

wonder if this could be the case with hispanic marketing.

In my more than three decades in the hispanic marketing field, first

as a graduate student researcher at Stanford’s Institute for Communica-

tions Research, and later as the founder and CEO of hispanic Market

Connections, Inc.4 and still later as an hispanic marketing consultant and

strategist, I have had opportunities to interact with hundreds of clients

and observe how they perceive the hispanic market. In an infamous case

that I included in my first book (Hispanic

Market Handbook, gale Research, Inc.,

1995), a marketing executive at a car

manufacturing company in Detroit told

me back then, that marketing cars to his-

panics had no purpose, “Big Sombrero,

No Money.” Unfortunately, a stereotype

that has been proven wrong many times

continues to live in the unconscious mind

of American popular culture. “hispan-

ics don’t have money.” Never mind that

every 12 months or so, the hispanic mar-

ket “creates” another $75 billion to $100

billion in disposable income.

Fortunately, not every business suc-

cumbs to stereotypes. For example, in the late 1990s, honda retained me

to team up with its hispanic advertising agency, La Agencia de Orci and

Asociados, to introduce its brand to the hispanic market. The directive

from the Japanese CEO was clear: “Win the hispanic market not once,

but long-term” and “earn the right to do business with the hispanic com-

munity.” he suggested that I take a month to think about and propose a

4. Hispanic Market Connections, Inc., was sold and publicly traded in 1998.

hispanic Marketing “sustainability”Projected growth every 12 months

2.1 million new Hispanic consumers, about 5,000 a day, contributed mostly by higher fertility rates (2.4 births per Latina vs. 1.8 for White non-Hispanic) and less by immigration

$75 to $100 billion more in income

Half a million new Hispanic households

$1.1 trillion in estimated spending power in 2011

•

•

•

•


Inroduction: Business Growth and Sustainability Are Hispanic! xix

comprehensive strategic primary research program that would provide

the insights and intelligence to win the market. he added, “It does not

matter the color of the hand holding the dollar, but to be able to earn

it with respect!” The funds allocated to “win the hispanic market” were

commensurate with the opportunity, and with the savvy expertise of the

folks at La Agencia, in less than a year honda’s sedan models were the

best selling among hispanics for decades.5 It was done “in-culture” build-

ing “Shares of heart.”

In addition, we rarely learn about the amazing things taking place every

day in our community. For example, the story of probably the youngest

CEO in America, nine-year-old, Max Valdez, President, Cupcakes to the

MAX, who successfully sells cupcakes

on a daily basis. It helps to be the son

of Jeff Valdez, accomplished Latino

film director. however, Max runs the

company and it was his idea! Another

great story is that of a successful

marketer at Frito-Lay, my dear friend

Richard Montanez, famous for creating

and bringing to market the first line

of authentic hispanic-flavored chips

which include the delicious Flamin’

hot Cheetos. he also launched the first

bilingual packaging.

Richard proudly tells me that he

started his career at Frito-Lay as a jan-

itor’s room clerk. he laughs, and adds,

“This is the equivalent, the hispanic

version of starting as a clerk in the ‘mail

room’ for the Anglos!”

As Malcolm gladwell writes in Blink, “The giant computer that is our

unconscious silently crunches all the data it can from the experiences

Who is hispanic in the u.s.?Hispanics are considered an ethnic category rather than a racial group. Therefore Hispanics can be from any race—Black, White, Asian, Meztizo Indian, etc.—and are from many cultural backgrounds. Often the uniting factor is the Spanish language and Hispanic culture. In this book, you will find the terms Latino and Hispanic used interchangeably.

Because Hispanics may be of any race, the Census Bureau usually refers to the General Market, “non-Hispanic Whites”—people who have said they are White, but have not indicated they are Hispanic. Three out of every five Hispanics living in the United States were born here.

5. The Honda case study appears in my book, Marketing to American Latinos: A Guide to the In-culture Approach (Paramount Market Publishing, Inc., 2000)


xx WIN! The Hispanic Market

we’ve had, the people we’ve met, the lessons we’ve learned, the books

we’ve read, the movies we’ve seen, and so on, and it forms an opinion.

That’s what is coming out in the IAT [implicity association test].”6

hence, this book, Win the Hispanic Market. To provide the best-in-class

from the experts as to why—and how—corporate America must move

to successfully do business with the hispanic consumer market. And it

must move quickly.

How many are you missing?

Few companies know how many hispanics could be their customers and

few know how to find out how many of their potential customers are miss-

ing. My question is, can you afford not to know the size of the prize?

good insights can be expensive and require the time and help of

experts who know the culture and language of potential and current

customers. however, this is “your value business growth, sustainability

market segment.” This is the consumer segment that adds half a million

new households every 12 months, households in the family formation

years, and with larger families. This is the market you can go to today

when business is slow. But to see reliable results, you want to add value

to your research when you turn to experts.

Yet, most corporations have to do “numbers patchwork” to get to

some estimated “sort of ” reliable hispanic market business sizing number.

When it comes to metrics and tracking results, many overlook a substan-

tial part of their customer base. Sadly, much of the current syndicated

data available is incomplete or under-represents hispanic consumer sales,

or is missing culturally relevant facts. hispanic marketing executives and

their teams work hard to target hispanic consumers. Yet, every time retail

data misses a sale or the service delivery of an hispanic customer, it is

counted as a non-hispanic sale. I call this “the leaky bucket syndrome.”

In other words, it is almost impossible to get to the true sales numbers,

and therefore difficult for managers to ask for, or defend, the appropriate

budget allocations. This is a serious flaw in the hispanic research trade

6. Blink, Malcolm Gladwell, Back Bay Books, 2007, p. 85.


Inroduction: Business Growth and Sustainability Are Hispanic! xxi

and, as many authors in this book underscore, it urgently needs to be

addressed and solved.

Retailers, marketers, brand managers, not-for-profits, all need a reli-

able and consistent process for collecting data rather than doing it on a

random basis when someone on the board of directors or in the C-Suite

asks a question. It must be a base component in the corporate organiza-

tion. And the process needs to include sharing the data with the people

in marketing, finance, product development, sales, and retail to help make

grounded, fact-based decisions and avoid missing an important part of

your customer base. You should ask these questions and demand reliable

answers from your research suppliers, because business growth and sus-

tainability in the foreseeable future requires that you understand deeply

the hispanic market by its metrics.

Live in the present, not the past

In many ways, there is a paradigm shift between the old and new as we

complete the first decade of a new century.

In the past, you didn’t know how to identify your specific hispanic

customer segments. Thanks to new technology you can now iden-

tify hispanics by country of origin, language and acculturation

and learn exactly where they live and the products they purchase.

You can see where growth is occurring, and segment the hispanic

market by consumer behavior.

In the past, you assumed that in all high-end business categories, his-

panic customers would respond to advertising in English because

you also assumed that Spanish-dominant customers did not have

enough money to acquire your products. Now you know that you

have hispanic customers with the necessary income. however, they

may not speak or grasp the English language enough to get your

advertising message.

In the past, you could not know the language preference of your

hispanic customers. Today you can readily segment hispanics by


xxii WIN! The Hispanic Market

language preference and by where they live and shop. Today you

also know that many hispanic consumers who are bilingual prefer

to consume media in Spanish because it is part of their cultural

heritage, and you know this can be even more effective, since for

bilingual consumers, advertising message recall is greater in their

primary language.

In the past, you planned products and advertising for the “main-

stream,” meaning White, English-speaking consumers. The new

mainstream is multicultural.

In the past, you could target your hispanic marketing efforts to a

very few states and metro areas and you would reach the majority

of hispanics. Now, hispanics are dispersing to more markets

throughout the United States. New census data and new geo-

segmentation technology will help you target more successfully,

wherever they are.

In the past, you could target hispanic consumers successfully mostly

or exclusively through mass media. Today you know it is impera-

tive that your corporate platform also include programs reaching

the hispanic community through grassroots organizations, as well

as communications programs with the broader hispanic society,

including hispanic leaders, government and policy makers, with

independent PR campaigns directed to them.

In the past, the “digital divide,” was huge and Latinos were significantly

absent from the internet. Today, hispanic youth is one of the most

active segments in the new electronic social media and you need

to include it in your media plan.

In the past, you didn’t need to worry about having a multicultural

workforce. Now you know that your employees as well as your

customers like to see people “who look like them” and reflect the

make-up of the United States in their board rooms and C-Suites

and at all levels in management. Now, your business growth may

depend on the vision, contributions and innovations made by an

associate that understands well the multicultural customer.


Inroduction: Business Growth and Sustainability Are Hispanic! xxiii

In the past, you thought you could do without specialized marketers who

know and understand hispanic culture and hispanic customers.

Now, you must incorporate Latino marketers and advertisers into

your corporate strategy.

In the past, hispanic voters were treated as a monolithic group, but

hispanics can no longer be considered as a voting block. Not all

hispanics care about the same issues.

In the past, businesses designed their pay, working hours, benefits, and

travel requirements around the needs of White, male-dominated

breadwinners. Increasingly the needs of multicultural, two-earner

households and single-parent households need to be taken into

consideration, which may mean flexible working hours, using tech-

nology to hold meetings rather than requiring travel, and childcare

or cafeteria benefits, among other things.

In the past, the CEO was boss. Today the consumer is Boss. As former

Chairman and CEO of Procter & gamble, A.g. Lafley says, “Our

goal at P&g is to delight our customers at ‘two moments of truth’:

first, when they buy a product, and second, when they use it. To

achieve that, we live with our consumers and see the world and

opportunities for new product initiatives through their eyes. We do

this because we win when more consumers purchase and use our

brands—and do so repeatedly.”7 This is the only way to succeed

In-culture and build lasting “heart Shares” with your customers

and consumers.

In the past, hispanic marketing was a choice a few leaders made. Now

a holistic and consistent hispanic strategy is a requirement for

innovation and sustainable business growth.

Corporate America and all organizations must respond to this new

paradigm by incorporating hispanics, African Americans, Asians and

other cultural groups into their company cultures, from the boardroom

7. The Game Changer: How You Can Drive Revenue and Profit Growth with Innovation, New York: Crown Business, 2008, pp 4–5.


xxiv WIN! The Hispanic Market

to product innovation, from retail to basic marketing and advertising.

Recognizing the financial power and the growing strength of the multi-

cultural consumer you will be able to respond to the shifts in American

society and hence, win in the marketplace.

The Mission — The Book

The mission of this book is to bring together expertise across disciplines

that can help you strategize, aim, successfully execute and measure the

size of the prize—the sustainable business growth you can expect from

the growing hispanic market.

Certainly one book cannot cover all the possible issues or categories

relevant to hispanic marketing and the marketplace. The book does how-

ever bring together hispanic market experts covering the shared “why”

and “how” that apply across corporations and most business categories.

First, the perspective from the board room and Corporate, or C-Suite,

Michael Klein and David Wellisch co-founders of Latinum Network (Chap-

ter 1) will tell you why Wall Street will look at and consider your corpo-

rate hispanic strategy in its valuations, and two POVs (Point of View)

about why hispanic representation is needed not only at executive levels

of leadership and management but across levels from Carlos Orta and

Alison Kenney Paul.

In Chapter 2, Carlos Santiago, CEO of SSg will deep dive into market-

ing and ask you the questions you need to consider to show you how to

right-size the hispanic business opportunity to avoid disappointment.

This section includes a POV regarding the challenges facing the hispanic

market industry.

Throughout the book you will hear from the different experts why you

should elevate the hispanic market in your corporate strategy. As Marie

Quintana of PepsiCo tells us in Chapter 3, this is no longer a niche mar-

ket, it is THE market, and building deep relationships with retailers is the

way to go! gabriela Alcántara-Diaz shows us how the demographic shifts

have impacted the new marketplace even within the hispanic market and

a POV on authentic hispanic Supermarkets from one of the foremost

experts in the industry, Don Longo, closes this retail section.


Inroduction: Business Growth and Sustainability Are Hispanic! xxv

Chapter 4 focuses on state-of-the-art tools and consumer intelligence.

From César Melgoza, CEO of geoscape, you will learn about the latest in

geo-segmentation systems that are helping successful marketers, media

planners and retailers today to reach their multi-cultural consumers with

laser precision. Also in Chapter 4, you will have access to the best, gold-

standard data in language segmentation, media usage and other relevant

in-culture socio-demographics from Doug Darfield, Nielsen Media.

In Chapter 5, Roberto Orci, CEO of Acento Advertising, will explain

how to make the best choices for reaching your Latino customers, from

acculturated to non-acculturated with a comprehensive media plan strat-

egy. Then, Lee Vann, CEO of The Captura group, shares the know-how

on the successful use of a variety of new social media platforms highly

popular with Latinos and Lucia Ballas-Traynor, co-founder of CafeMom,

shares the latest insights on capturing Latinas online. Closing the chapter

is a POV on the oldest hispanic advertising media, print by business leader

Martha Montoya.

In Chapter 6, dedicated to primary hispanic marketing research, you

will find specific steps you need to take to avoid mistakes and limitations

with your market data online and not online, by one of the authorities

in the industry, Carlos garcia, SVP of Knowledge Networks and Cada

Cabeza online panel. You will also learn the common pitfalls in primary

research and what you need to know to make sure your hispanic mar-

keting research dollars give you the data and reliablility you need, co-

authored by Dr. Federico Subervi, Director of the Center for the Study of

Latino Media and Markets School of Journalism & Mass Communication,

Texas State University-San Marcos and myself. And in Chapter 7, Derene

Allen will share her findings regarding why giving back to the community

helps you deepen your relationship with your customers.

From the board room to the hispanic retailer, it is a new game to win

the U.S. hispanic market.


Documents

WIN! - Isabel Valdés · PDF fileDoug Darfield • Roberto Orci • Lee Vann • Lucia Ballas ... make subconcious decisions based on ... the insights and intelligence to win the market